Spread and pips

Spread and pips are two very important concepts of foreign exchange trading. It tells you what they mean.

Spread and pips
18. July 2024 by Click insider / Forex Trading

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Spread is the difference between the price you can sell a currency (offer / bid) and the price you can buy currency for (demand / ask). Currency Brokers operate with different spreads, some are better than others. We recommend any services that offer low spreads, but you should not see only the spreads, there are also a number of other aspects of a currency service that one must emphasize.

Pip is the smallest unit of an exchange rate change. Explained with an example, there is a 3 pip spread so if EURUSD is the course for a purchase price of 0.9875 and a selling price of 0.9878 then the difference in USD 0.0003, which is the same as 3 pips.

It is easier to understand these concepts when you start to trade yourself.

Trading using spread and pips

to make money in forex trading, you do not necessarily have to follow the news.

You place your orders in the foreign exchange market, and if there is one trick that has meant that people have become rich in forex trading, it is this:

Trust the trend and follow the trends slavishly.

(Read about a service that can be used for trend trading, later in this article)

You must learn to trust that the trend is the major factor that can be used to determine the direction of the currency market.

Trends can be seen from a long term perspective, or shorter term. We call it the short-term trend and long-term trend.

GBPUSD has shown a positive development in the long term? Ok, we have a rising long-term trend, and you should place your order then if you act in the long term.

GBPUSD may still have a negative short-term trend. It can be about a trend picture in the last 15 minutes. Then it is likely that the trend will continue in the negative direction for the next 3-4 minutes. You can then purchase enough with USD, and sell back again after a few minutes and make money if the trend continues.

Whether you are a pro or a beginner, it is generally best to keep a good eye on the direction of a trend. Exchange rates are going up and down, but usually it pays to follow the trend.

If you plan to carry out a transaction that spans only a few minutes / hours it is the current trend you must be oppmerksompå, and accordingly the long term trends you need to follow the long-term trend.

Technical analysis does not get easier than this. With what you've learned in this article you can actually earn great money.

Which currency is best brokers to trade on trends?

There are currency brokers who have built tools that make it a breeze to identify trends, we would particularly recommend a forex broker for this purpose.

To follow trends and of course no guarantee that you will make money or get rich, but guess it is an effective method, and often it works extremely well! The advantage is that it requires minimal knowledge, and it makes sense to use trends as an argument for buying / selling in the currency market.

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